Delta Company November 30 Balance Sheet 2013 2014 Cash $160 $300 Accounts Receivable $420 $480 Inventory $500 $730 Equipment $2,000 $2,500 Less Accumulated Depreciation $(1,000) $(1,200) Total Assets $2,080 $2,810 Accounts payable $280 $310 Other current liabilities $300 $500 Notes payable Long Term $600 $700 Common Stock $400 $600 Retained Earnings $500 $700 Total liabilities and stockholders' equity $2,080 $2,810 Income statement Net sales $1,550 $1,840 Cost of goods sold 920 1060 Gross margin 630 780 Expenses: Salaries 200 250 Warehousing costs 90 120 Advertising 120 70 Taxes 45 75 Total expenses 455 515 Net income $175 $265 Calculate the following for the year 2014: 1. Current Ratio 2. Accounts Receivable Turnover 3. Inventory Turnover
Delta Company | |||
November 30 | |||
Balance Sheet | 2013 | 2014 | |
Cash | $160 | $300 | |
Accounts Receivable | $420 | $480 | |
Inventory | $500 | $730 | |
Equipment | $2,000 | $2,500 | |
Less Accumulated Depreciation | $(1,000) | $(1,200) | |
Total Assets | $2,080 | $2,810 | |
Accounts payable | $280 | $310 | |
Other current liabilities | $300 | $500 | |
Notes payable Long Term | $600 | $700 | |
Common Stock | $400 | $600 | |
Retained Earnings | $500 | $700 | |
Total liabilities and stockholders' equity | $2,080 | $2,810 | |
Income statement | |||
Net sales | $1,550 | $1,840 | |
Cost of goods sold | 920 | 1060 | |
Gross margin | 630 | 780 | |
Expenses: | |||
Salaries | 200 | 250 | |
Warehousing costs | 90 | 120 | |
Advertising | 120 | 70 | |
Taxes | 45 | 75 | |
Total expenses | 455 | 515 | |
Net income | $175 | $265 | |
Calculate the following for the year 2014: | |||
1. Current Ratio | |||
2. Accounts Receivable Turnover | |||
3. Inventory Turnover |
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Related questions
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||||||
This Year | Last Year | |||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 1,280 | $ | 1,560 | ||
Accounts receivable, net | 12,300 | 9,100 | ||||
Inventory | 9,700 | 8,200 | ||||
Prepaid expenses | 1,800 | 2,100 | ||||
Total current assets | 25,080 | 20,960 | ||||
Property and equipment: | ||||||
Land | 6,000 | 6,000 | ||||
Buildings and equipment,net | 19,200 | 19,000 | ||||
Total property andequipment | 25,200 | 25,000 | ||||
Total assets | $ | 50,280 | $ | 45,960 | ||
Liabilities andStockholders' Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 9,500 | $ | 8,300 | ||
Accrued liabilities | 600 | 700 | ||||
Notes payable, short term | 300 | 300 | ||||
Total current liabilities | 10,400 | 9,300 | ||||
Long-term liabilities: | ||||||
Bonds payable | 5,000 | 5,000 | ||||
Total liabilities | 15,400 | 14,300 | ||||
Stockholders' equity: | ||||||
Common stock | 800 | 800 | ||||
Additional paid-in capital | 4,200 | 4,200 | ||||
Total paid-in capital | 5,000 | 5,000 | ||||
Retained earnings | 29,880 | 26,660 | ||||
Total stockholders' equity | 34,880 | 31,660 | ||||
Total liabilities andstockholders' equity | $ | 50,280 | $ | 45,960 | ||
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||||||
This Year | Last Year | |||||
Sales | $ | 79,000 | $ | 74,000 | ||
Cost of goods sold | 52,000 | 48,000 | ||||
Gross margin | 27,000 | 26,000 | ||||
Selling and administrativeexpenses: | ||||||
Selling expenses | 8,500 | 8,000 | ||||
Administrative expenses | 12,000 | 11,000 | ||||
Total selling and administrativeexpenses | 20,500 | 19,000 | ||||
Net operating income | 6,500 | 7,000 | ||||
Interest expense | 600 | 600 | ||||
Net income before taxes | 5,900 | 6,400 | ||||
Income taxes | 2,360 | 2,560 | ||||
Net income | 3,540 | 3,840 | ||||
Dividends to commonstockholders | 320 | 600 | ||||
Net income added to retainedearnings | 3,220 | 3,240 | ||||
Beginning retained earnings | 26,660 | 23,420 | ||||
Ending retained earnings | $ | 29,880 | $ | 26,660 | ||
Required:
Compute the following financial data for this year:
1. Accounts receivable turnover. (Assume that all sales are onaccount.) (Round your answer to 2 decimalplaces.)
2. Average collection period. (Use 365 days in a year.Round your intermediatecalculations and final answer to 2 decimal places.)
3. Inventory turnover. (Round your answer to 2 decimalplaces.)
4. Average sale period. (Use 365 days in a year.Round your intermediatecalculations and final answer to 2 decimal places.)
5. Operating cycle. (Round your intermediatecalculations and final answer to 2 decimal places.)
6. Total asset turnover. (Round your answer to 2 decimalplaces.)
P23-3 (SCFâDirect Method) MortonsonCompany has not yet prepared a formal statement of cash flows forthe 2014 fiscal year. Comparative balance sheets as of December 31,2013, and 2014, and a statement of income and retained earnings forthe year ended December 31, 2014, are presented below. | |||
MORTONSON COMPANY | |||
Statement of Income and Retained Earnings | |||
For The Year Ended December 31, 2014 | |||
($000 Omitted) | |||
Sales | $3,800 | ||
Expenses | |||
Cost of goods sold | $1,200 | ||
Salaries and benefits | 725 | ||
Heat, light, and power | 75 | ||
Depreciation | 80 | ||
Property taxes | 19 | ||
Patent amortization | 25 | ||
Miscellaneous expenses | 10 | ||
Interest | 30 | 2,164 | |
Income before income taxes | 1,636 | ||
Income taxes | 818 | ||
Net income | 818 | ||
Retained earnings - January 1, 2014 | 310 | ||
1,128 | |||
Stock dividend declared and issued | 600 | ||
Retained earnings - December 31, 2014 | $528 | ||
MORTONSON COMPANY | |||
Comparative Balance Sheet | |||
December 31 | |||
($000 Omitted) | |||
Assets | 2014 | 2013 | |
Current assets | |||
Cash | $333 | $100 | |
U.S. Treasury notes (Available-for-sale) | 10 | 50 | |
Accounts receivable | 780 | 500 | |
Inventory | 720 | 560 | |
Total current assets | 1,843 | 1,210 | |
Long-term assets | |||
Land | 150 | 70 | |
Buildings and equipment | 910 | 600 | |
Accumulated depreciation | (200) | (120) | |
Patents (less amortization) | 105 | 130 | |
Total long-term assets | 965 | 680 | |
Total assets | $2,808 | $1,890 | |
Liabilities and Stockholders' Equity | |||
Current liabilities | |||
Accounts payable | $420 | $330 | |
Income taxes payable | 40 | 30 | |
Notes payable | 320 | 320 | |
Total current liabilities | 780 | 680 | |
Long-term notes payable - due 2016 | 200 | 200 | |
Total liabilities | 980 | 880 | |
Stockholders' equity | |||
Common stock outstanding | 1,300 | 700 | |
Retained earnings | 528 | 310 | |
Total stockholders' equity | 1,828 | 1,010 | |
Total liabilities and stockholders' equity | $2,808 | $1,890 | |
Instructions: | |||
Prepare a statement of cash flows using the direct method.Changes in accounts receivable and in accounts payable relate tosales and cost of sales. Do not prepare a reconciliationschedule. | |||
MORTONSON COMPANY | |||
Statement of Cash Flows | |||
For The Year Ended December 31, 2014 | |||
($000 omitted) | |||
Cash flows from operating activities | |||
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Net cash provided by operating activities | Formula | ||
Cash flows from investing activities | |||
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